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Bill McKibben weighs in.
Spot on, as usual.
… it’s the narcissistic corners of the brain that persuade each of us that we are uniquely important and deserving, and make us want to except ourselves from the rules that society or morality set so that we can have what we want. “Most people’s caring self is strong enough to hold their inner exception in check,” she notes, but, troublingly, “ours is the Golden Age of Exceptionalism.” Neoliberalism—especially the ideas of people such as Ayn Rand, enshrined in public policy by Ronald Reagan and Margaret Thatcher—“crossed a Rubicon in the 1980s” and neoliberals “have been steadily consolidating their power ever since.” Weintrobe calls leaders who exempt themselves in these ways “exceptions” and says that, as they “drove globalization forwards in the 1980s,” they were captivated by an ideology that whispered, “Cut regulation, cut ties to reality and cut concern.” Donald Trump was the logical end of this way of thinking, a man so self-centered that he interpreted all problems, even a global pandemic, as attempts to undo him. “The self-assured neoliberal imagination has increasingly revealed itself to be not equipped to deal with problems it causes,” she writes.
His interview in the middle of the piece with the woman from Malawi was painful to read.
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https://www.digitaldollarproject.org/faq
And a couple on the digital yuan:
Yep, surely all my imagination and crystal ball-gazing, mmhm.
in my opinion, you seem to be conflating two different concepts. the notion of a cryptocurrency and that of a digital currency. the whole point, it seems to me, of a cryptocurrency is to use blockchain system to create a currency which is beyond the control of any centralized authority. unfortunately, all it seems to have done is create an environmentally wasteful investment toy.
the digital yuan, on the other hand, is a digital version of the paper yuan controlled by the same central bank which is in control of the paper yuan. it makes no use of blockchain and it does not create the environmental wastefulness which appears inherent in bitcoin. i’m having a hard time picturing how the digital yuan and the digital dollar described in the above article fit into the cryptocurrency model at all.
i know people right now who use dollars in a way that is purely digital. they receive their pay through electronic transfers into their bank accounts. they use automatic transfers to pay their bills, they use debit cards to electronically pay for groceries, gas, food, etc. a few of them are so uncomfortable with cash that, when someone pays them in cash, they immediately deposit it in an atm so they can “use” it. for them, the switch to “digital dollars” would make no difference to their daily lives because they’re already there.
despite the existence of the occasional point-of-sale terminal and a few online venues which will accept cryptocurrencies, of the largest online and physical retailers in the u.s. only microsoft accepts bitcoin directly and only for payments to their xbox online segment. while home depot will accept it through the use of an app which mediates the transfer. when it becomes, if not common, at least possible to immediately transfer value from one’s bitcoin account directly to the bitcoin account of amazon, walmart, costco, h.e.b., etc. for the exchange of goods and services i will probably be willing to entertain the notion that bitcoin represents a currency. so long as it remains the domain of a few specialized venues requiring the mediation of apps and pos terminals, not so much. while it may be somewhat easier to transfer value from one’s bitcoin “wallet” into “name your local currency” than it is to transfer value from one’s picasso into “name your local currency”, both transfers very much require third-party mediation to effect except in very constrained circumstances.
i also wish to point out that while i am not an economist, i have taken the basic macro and micro economics courses, i’ve also read works about economics both historical and recent, as well as having taught a high school course on financial mathematics for the past three years. i’m in no way a subject-matter expert and yet i understand and appreciate the distinction between “arbitrary” and “imaginary”, a distinction you seem inclined to gloss over. i also find it interesting that, while you keep saying that you aren’t arguing in favor of crypto you seem to be somewhat vehemently opposed to anyone arguing against crypto.
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Not so much in my experience.
While the arbitrary nature of the actual material used comes up it’s often just to undermine the gold bug claims that “real” money has inherent value.
Otherwise history and economics spend a lot of time unpacking just how non-arbitrary money and it’s value are. Like I said above money has value because states will it, and take measures to make it happen.
“Giant stone wheels” were not one of the first forms of money. The Rei stones in Micronesia only seem to have cropped up a few hundred years ago, early evidence is 18th century. And they didn’t really function as money. They were ceremonially transferred as part of social rights. And while their control was connected to wealth and social status, they seem to be mostly votive objects.
The earliest forms of “money” in the conventional sense we’ve identified are ledgers.
Specifically records of the collection and distribution of grain in public granaries controlled by temples. In fixed weight measures. That gave rise to clay tokens representing that fixed amount of grain, currently in storage and redeemable at said temples.
And down the line when true coinage appeared fixed measures of grain would provide the base denominations.
Can you get your pay check in crypto?
Can you take a loan in crypto?
Can you pay your taxes in crypto?
I “bought” a graphics card with a box of baseball cards once. Doesn’t make baseball cards a currency.
All the behaviors, functions and usages of crypto currently are consistent with a financial vehicle. That people are willing to barter with it doesn’t change that, particularly since most people willing to accept it seem primarily interested in holding what they aquire as an investment.
Don’t put words in my mouth.
I was flatly saying that regulation coming down had nothing to do with authorities seeking to legitimize crypto because magical thinking. And everything to do with addressing the very real harm its very non-theoretically causing.
If I was implying anything it’s that crypto is worse than regulated financial vehicles and markets.
There’s little difference between what’s going on with Bitcoin currently and other speculation bubbles in the investment market. Which is constantly looking for financial products that can skate around regulations so they can post huge gains using tactics and actions otherwise deemed illegal and dangerous.
Just like we saw with mortgage back securities in the lead up to the great recession.
Looked at that way, the heavy interest in crypto in the financial industry and by private companies is not a sign or step to legitimacy. But a huge risk to the stability of the overall economy. The sort of risk where the rich get richer and the rest of us are left holding the bag.
Regulation isn’t about getting in on it and making all your crypto dreams come true. Lest governments get out competed (which isn’t even how money works).
It’s an already too slow attempt to head off another global recession.
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It’s both. Actually it’s all three: a problem with energy production, a problem with cryptocurrency and a problem with Bitcoin specifically. Its especially bad because of where we get our energy but no matter what it is a huge waste. It would be a waste if people were building wind farms and solar panels to power it, it would be a waste if we had viable nuclear fusion. The idea that we will ever be “post scarcity” in terms of producing energy at the level Bitcoin requires is just not realistic.
The problem is intrinsic to BTC in a couple of ways. First, for security it requires consuming enough resources that nobody can mount an effective attack. That means the cost to attack has to be greater than the value. To be a global currency it would have to capture some reasonable percentage of global resources. The second way is related. The difficulty scaling and mining rewards means that as costs go down (of silicon, electricity, whatever) the resource consumption goes up to match. It is designed to be resistant to progress.
There are a bunch of social and economic problems with Bitcoin as well, but the technical ones are enough to damn it
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Yep, there’s really no way around this. If renewable energy were plentiful and free then people would just spend more and more of the world’s resources on producing the graphic cards, etc. to make ever more bitcoin. Bitcoin requires scarcity to have any value, and the scarcity will always be driven by the cost of the resources needed to produce more. If the resources become cheaper then people will use more of them.
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The USD is a real currency because the US Govt insists on being paid taxes in USD, under penalty of force. I would quite happily sell you some crap in USD right now because I know I could trade it with someone who could pay their taxes in it.
Being backed by precious metals/rice/blocks of stone is a diversion that’s coming up on 100 years of being out of date.
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Even as a mechanism it’s a fairly recent one. Really early money tokens were often practically useless or had little value outside the context of their use. Shells, clay tokens, early Chinese coinage was often cast iron. Effectively a byproduct of steel and wrought iron production. One early form of money were metal ingots that appear to have mostly been based on and used as ship’s ballast.
And it all started with hash marks on sticks or clay tablets.
Even your classic precious metal coinage was almost always debased vs it’s metal content and actual value.
The gold standard was effectively an early modern/modern approach to stabilizing currency before the advent of current monetary theory and centralized banking.
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It is however illustrative of one economic reason why bitcoin is a bad idea.
Most of the world abandoned the gold standard for the silver standard, and then abandoned the silver standard basically because there wasn’t enough of it to support the growing world economy. A good reference for this is xkcd: Money where you can see the value of all gold ever mined vs. the world GDP. The problem with the gold standard was that actual economic growth (farming, manufacturing, etc) was just enriching the people who held the gold, not the people who did the work. Thats why people complain about bitcoin being deflationary. It enriches people who hoard currency and do no work. The economy already does enough of that already thank your very much. More broadly tying currency of exchange to a single limited commodity is not sensible monetary policy, whether it is gold, oil, or bitcoin.
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To reinforce your point on energy wasted - every hash that doesn’t add to the ledger represents wasted energy, and people will spend energy “mining” for as long as (or longer) their expected earnings are positive. The more miners there are on the BTC network, the more energy is wasted as it’s 1 block per 10 minutes.
So as long as these blockchains keep going based on proof-of-work, some energy will be wasted.
An apologist is about to say “but proof of stake”, but they’ve been saying that for several years now. STFU until it’s relevant to the discussion.
No energy source is 100% clean. I’m not OK with us flooding entire towns to generate dams for hydro, for the entire output of that hydro plant to generate 1MB of transactions every 10 minutes. Nor am I ok with storing nuclear waste for 10,000 years, for 1 MB of transactions to be written every 10 minutes.
But, if only we were mostly using energy as clean as hydro and nuclear. In reality we are mining fossil fuels that would otherwise still be in the fricking ground to generate … 1 MB of transactions every 10 minutes.
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Oh, oh. Some other apologist is going to jump in and say “lightning” which they have been saying for several years now, but doesn’t really seem to be catching on. And it basically requires a small number of massive banks, and you have to continuously audit the block chain to make sure nobody is ripping you off by submitting the completion transactions, you have no recourse if they do and you don’t catch it because you went on a vacation that lasted more than 3 days, and it’s conduit mechanism doesn’t actually match how normal people make financial transactions.
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No extra credit for figuring out why the Chinese government might be in favour of that particular idea.
If you’re already tracking every citizen’s “social score” to reward or penalise them based on their behaviour, then a convenient method of tracing who spends which amount of money on what is a very interesting source of data.
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Oh? Try paying taxes in another country with those US dollars or with rubles in the US =) .
Yes, cryptocurrencies ARE currencies, whether or not they are as useful for any given purpose as any other given currency:
Note “usually issued by a government,” NOT always.
The difference is, no cryptocurrency besides the digital renminbi/yuan is legal tender (AKA “legal currency”) yet. And yes, the digital yuan IS a cryptocurrency that uses (vastly streamlined and more efficient than BTC) “private blockchain” underpinnings.
(A little old but has some more info in the digital yuan.)
The main difference I see, is that all the blockchain calculations are centralized, rather than calculated by everyone, all the time, allowing full control by the state, as well as drastically lower processing costs.
i strongly suspect that if alan s. blinder, thomas piketty, and paul krugman themselves came by to gainsay your position you would persist in maintaining it. regardless, by all means, have it your way: the rest of us are clearly a bunch of ignorant rubes with no knowledge, experience, or the ability to follow your arguments while you are a fount of wisdom trying valiantly to show us the way.
have a lovely evening.
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Disney dollars are currency. What does that prove?
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What’s with you missing other people’s points right after they were said? He literally just said that he would happily sell you something for USD because he could trade it to someone who could pay their taxes in it, and this is seriously your answer?
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You mean the exact dynamic he’s talking about?
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Trump was no neoliberal, in fact he capitalized on the movement against “neoliberal globalists”
Perhaps McKibben is grouping his enemies together a little too broadly
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I agree that “neoliberal” isn’t really the right label to apply to Trump. Trumpism broadly falls under the umbrella of “fascism” but the real central tenet of his political movement is “Trump is the Greatest Thing Ever, anyone who disagrees can suck it.”
If Donald Trump flipped his positions on environmental regulation or vaccines or whatever tomorrow his cultists would claim they already believed in those things all along without missing a beat.
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